A milestone in the fast changing business of education: Georgia Tech, one of the top computer science programs in the country, is offering an online masters degree in computer science for just $7,000. Unlike competitors who price their online degrees about the same as their residential ones, Georgia Tech decided to charge just enough to cover costs. From the New York Times article:

With one of the top 10 computer science departments in the nation, according to U.S. News & World Report, Georgia Tech had a reputation to uphold. So it made the online program as much like the residential program as possible.Charles Isbell, a senior associate dean at the College of Computing, helped lead the effort. Mr. Isbell has a Ph.D. in artificial intelligence and machine learning from M.I.T., and he teaches those subjects at Georgia Tech. He translated his lectures into well-produced online videos while administering the same homework assignments, midterms and final exams. Tests are proctored by a company that locks down a student’s computer remotely and uses its camera to check for cheating.In theory, on-campus programs offer direct access to professors and peers. Mr. Isbell began noticing differences in that respect between his residential and online students. He was interacting much more with students who had never set foot on the Atlanta campus.“I never see students at my office hours,” he said. A few linger after class to ask scheduling questions, but that’s about it.Many of the thousands of online students, by contrast, are constantly interacting on a website set up for that purpose, where Isbell can log on and help. “I can jump in and say: ‘No, you should be thinking about this,’ ” he said. “I spend more time helping them with assignments online than I ever do on campus. The experience for the students and for me is much richer online.”

The Great Enrichment began in 17th-century Holland. By the 18th century, it had moved to England, Scotland and the American colonies, and now it has spread to much of the rest of the world.

Economists and historians agree on its startling magnitude: By 2010, the average daily income in a wide range of countries, including Japan, the United States, Botswana and Brazil, had soared 1,000 to 3,000 percent over the levels of 1800. People moved from tents and mud huts to split-levels and city condominiums, from waterborne diseases to 80-year life spans, from ignorance to literacy.

...

What, then, caused this Great Enrichment?

Not exploitation of the poor, not investment, not existing institutions, but a mere idea, which the philosopher and economist Adam Smith called “the liberal plan of equality, liberty and justice.” In a word, it was liberalism, in the free-market European sense. Give masses of ordinary people equality before the law and equality of social dignity, and leave them alone, and it turns out that they become extraordinarily creative and energetic.

Because each additional Trumpism seems a bit less shocking than the one before, there is a danger of becoming desensitised to his outbursts. To recap, he has referred to Mexicans crossing the border as rapists; called enthusiastically for the use of torture; hinted that Antonin Scalia, a Supreme Court justice, was murdered; proposed banning all Muslims from visiting America; advocated killing the families of terrorists; and repeated, approvingly, a damaging fiction that a century ago American soldiers in the Philippines dipped their ammunition in pigs’ blood before executing Muslim rebels. At a recent rally he said he would like to punch a protester in the face. This is by no means an exhaustive list.

Publication bias renders much of new research unreliable. Somebody needs to check if the results hold up. Thankfully, a team of psychologists have done just that. From the New York Times article on the the findings:

... a painstaking yearslong effort to reproduce 100 studies published in three leading psychology journals has found that more than half of the findings did not hold up when retested. The analysis was done by research psychologists, many of whom volunteered their time to double-check what they considered important work. Their conclusions, reported Thursday in the journal Science, have confirmed the worst fears of scientists who have long worried that the field needed a strong correction.

The vetted studies were considered part of the core knowledge by which scientists understand the dynamics of personality, relationships, learning and memory. Therapists and educators rely on such findings to help guide decisions, and the fact that so many of the studies were called into question could sow doubt in the scientific underpinnings of their work.

“I think we knew or suspected that the literature had problems, but to see it so clearly, on such a large scale — it’s unprecedented,” said Jelte Wicherts, an associate professor in the department of methodology and statistics at Tilburg University in the Netherlands.More than 60 of the studies did not hold up. Among them was one on free will. It found that participants who read a passage arguing that their behavior is predetermined were more likely than those who had not read the passage to cheat on a subsequent test.Another was on the effect of physical distance on emotional closeness. Volunteers asked to plot two points that were far apart on graph paper later reported weaker emotional attachment to family members, compared with subjects who had graphed points close together.A third was on mate preference. Attached women were more likely to rate the attractiveness of single men highly when the women were highly fertile, compared with when they were less so. In the reproduced studies, researchers found weaker effects for all three experiments.The project began in 2011, when a University of Virginia psychologist decided to find out whether suspect science was a widespread problem. He and his team recruited more than 250 researchers, identified the 100 studies published in 2008, and rigorously redid the experiments in close collaboration with the original authors.The new analysis, called the Reproducibility Project, found no evidence of fraud or that any original study was definitively false. Rather, it concluded that the evidence for most published findings was not nearly as strong as originally claimed.Dr. John Ioannidis, a director of Stanford University’s Meta-Research Innovation Center, who once estimated that about half of published results across medicine were inflated or wrong, noted the proportion in psychology was even larger than he had thought. He said the problem could be even worse in other fields, including cell biology, economics, neuroscience, clinical medicine, and animal research.

If reproducibility studies like this become widespread in all dsiciplines, it will be a game changer.

I happened to be flipping through another introductory economics textbook. (Yes, some people have the temerity to try to compete with my favorite textbook.) I noticed an error that is, unfortunately, all too common in how introductory economics is taught.

[...]

The issue is how one applies welfare economics to understand price controls, such as rent control and minimum-wage laws.

The sin that this book makes is to look at consumer surplus, producer surplus, and deadweight loss as if we were studying the welfare cost of a tax. The cost of a price control, the reader is taught, is the small Harberger triangle between the supply and demand curves.

This reasoning is problematic because it assumes perfect rationing. But rationing under price controls is never perfect. Under rent control, for example, apartments do not automatically go to those who value the apartments the most. The misallocation due to imperfect rationing makes the actual welfare cost of price controls much higher than the standard deadweight loss triangle.

My book gets this right. In Chapter 12, in the section on price controls, I describe what happens when we put price controls on baseball bats. I then write:

There are two wrongs that were done here—two sources of inefficiencies. First, on the production side, too few bats got made. Second, on the consumption side, those few bats might have gone to the wrong people: a person who valued the bat at $70 might have gotten one while a person who valued it at $500 might have gone home empty-handed. [page 73]

My guess is that the second inefficiency--distributing the already scarce goods to the wrong people--is the bigger source of damage. It definitely should not be ignored when trying to assess the cost of price controls.

There is also a tertiary source of loss: time wasted in rent-seeking activities. This includes standing in lines, calling your contacts, etc. to find the artificially scarce good.

Besides the fact that a 11-year old can play like that, what's interesting to me is that he was born and brought up in Indonesia, far from the centers of the jazz scene. But he was still able to immerse himself in that world through CDs and YouTube videos. Yet another reminder of how technology has shrunk our world and expanded the boundaries of what's possible.

Economists discount any factors that would not influence the thinking of a rational person. These things are supposedly irrelevant. But unfortunately for the theory, many supposedly irrelevant factors do matter.Economists create this problem with their insistence on studying mythical creatures often known as Homo economicus. I prefer to call them “Econs”— highly intelligent beings that are capable of making the most complex of calculations but are totally lacking in emotions. Think of Mr. Spock in “Star Trek.” In a world of Econs, many things would in fact be irrelevant.No Econ would buy a larger portion of whatever will be served for dinner on Tuesday because he happens to be hungry when shopping on Sunday. Your hunger on Sunday should be irrelevant in choosing the size of your meal for Tuesday. An Econ would not finish that huge meal on Tuesday, even though he is no longer hungry, just because he had paid for it. To an Econ, the price paid for an item in the past is not relevant in making the decision about how much of it to eat now.

Making good decisions is not easy. It requires time, effort, and brainpower. People mess up all the time, especially when it comes to highly complex choices like saving and investing. We are not econs, and it's great that behavioral economists catalog all the ways in which we fall short.

But, when it comes to policy prescriptions, here's what behavioral economists often forget: Us bumbling individuals making our imperfect choices in free markets make decisions more in keeping with our own self-interest than a government bureaucrat choosing for us would. That's why traditional economic theory gives roughly the right answers. Behavioralists are quick to point out flaws in individuals, but ascribe perfect benevolence and intelligence to government employees. They seem to think that the White House and Congress and the DMV and the local school board are all staffed by ... Econs! And these are not just your regular econs. They are perfectly knowledgeable, wise, and benevolent econs who are always acting in other people's interests. They are super-econs!

According to recent surveys, between 20 and 25 percent of their permanent residents are middle class; roughly 60 percent are solidly working class or working poor who labor incredibly hard, advocate fundamental American values and aspire to the American dream for their children. Their youth share their parents’ values, expend considerable social energy avoiding the violence around them and consume far fewer drugs than their white working- and middle-class counterparts, despite their disproportionate arrest and incarceration rates.

In all inner-city neighborhoods, however, there is a problem minority that varies between about 12.1 percent (in San Diego, for example) and 28 percent (in Phoenix) that comes largely from the disconnected youth between ages 16 and 24.